Nvidia, Alphabet, Amazon lead AI stock rally

An analyst writing for the Motley Fool argues that Nvidia, Alphabet, and Amazon are among the most attractive AI stocks to buy, each for distinct reasons tied to the ongoing buildup of AI infrastructure and services. Nvidia is positioned at the center of the AI hardware supply chain. The company manufactures GPUs—the specialized processors that are the most important hardware for training large AI models—and has maintained a commanding lead through superior raw performance and its CUDA ecosystem, which creates high switching costs that lock customers in. The demand picture is robust: hyperscalers like Alphabet are ramping capital expenditure, and companies outside the cloud sector, including Tesla (electric vehicles) and Bristol Myers Squibb (pharmaceuticals), are also ordering Nvidia GPUs in volume. As long as AI infrastructure spending continues to expand, Nvidia stands to be a major beneficiary. Alphabet's opportunity is broader. The company's advertising business is being boosted by AI modes and AI overviews in search, which increase search volume and ad demand. Google Cloud is selling AI services—tools that let businesses build, customize, and deploy AI applications and agents—and the business is accelerating sharply: revenue grew 48% year-over-year in the fourth quarter of 2025, 63% in Q1 2026, and 82% in Q2. Alphabet recorded negative free cash flow in Q2, a fact some investors cite as a bearish sign, but the company's $514 billion（約82兆円） cloud backlog as of Q2 suggests it has locked in multi-year commitments and will continue to grow cloud sales. Alphabet is doubling down on AI spending to capitalize on its lead. Amazon, the third pick, operates Amazon Web Services (AWS), a major cloud competitor to Google Cloud. AWS sales growth has accelerated in recent quarters, and the analyst sees additional upside from applying AI across Amazon's core e-commerce business. Potential initiatives include more personalized product recommendations, AI-assisted tools for sellers to write faster and more accurate product descriptions, and improved search capabilities. Individually, each idea may seem incremental, but together they could drive higher engagement, grow gross merchandise volume on Amazon's platform, and improve margins. Beyond AI, Amazon has a large, diversified business and dominates many industries in which it operates, offering long-term growth potential for buy-and-hold investors.

The analyst's thesis rests on a simple observation: the three largest U.S. cloud and hardware providers stand to capture disproportionate value as AI infrastructure spending accelerates. Nvidia sits at the foundation—its GPUs are the mandatory hardware layer, and sustained orders from hyperscalers (Alphabet, Amazon) as well as non-cloud sectors (Tesla, Bristol Myers Squibb) indicate the demand runway remains intact despite skepticism about the company's staying power. Alphabet and Amazon occupy the next layer, selling cloud services and AI tools to enterprises. Alphabet's Google Cloud revenue growth of 48%, 63%, and 82% year-over-year across Q4 2025, Q1 2026, and Q2 respectively shows acceleration, and the $514 billion（約82兆円） backlog suggests this growth is not ephemeral but backed by long-term commitments. Amazon Web Services is following a similar trajectory, with accelerating sales in recent quarters. The analyst acknowledges one bear case—Alphabet's negative free cash flow in Q2—but argues the cloud backlog rebuts the idea that spending is wasteful. For Amazon, the upside extends beyond cloud services into e-commerce itself, where AI could deepen customer engagement through smarter recommendations and search. Together, these three stocks offer both direct exposure to AI infrastructure (Nvidia hardware, Alphabet and Amazon cloud services) and optionality on the broader AI application wave.

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